Microloan foundation is proud of helping out

In the 14 years since it was organized, the Washington, D.C.-based Grameen Foundation has made more than $12 million in small-business loans to mostly impoverished borrowers in 22 countries.

It's a modest amount compared with the billions of dollars many large banks lent borrowers during the same time.

But considering the average loan was about $50, Grameen's achievement is no small accomplishment - particularly since the foundation was started with just $6,000 in capital.

Besides making direct loans, the foundation has provided guarantees for more than $120 million of the so-called microloans that have been made by conventional lenders.

Altogether, the foundation, working with about 50 organizations, such as the Gilbert-based Guerrant Foundation, has helped more than 10 million people, mostly women, set up businesses in 22 countries.

Many of those women are now able to buy food and medicine for their families and send their children to school.

"We applied a business solution to a social cause and were able to help people pull themselves out of poverty, hunger and illiteracy," said Alex Counts, who founded the Grameen Foundation in 1997 with $6,000 given to him by Nobel Peace Prize winner Muhammad Yunus.

Yunus, through his Grameen Bank in Bangladesh, founded the principal of microlending that, through various agencies, has helped an estimated 180 million people start businesses worldwide.

The loans, typically $5 to $500 are used to start farming operations, weaving enterprises and other small businesses that have helped improve many lives.

Counts worked with Yunus in Bangladesh and founded the Grameen Foundation to carry out the work in other countries.

Counts was in Phoenix on Thursday, speaking at a luncheon hosted by the Guerrant Foundation and the Arizona Community Foundation.

He explained that one program lent money to people in small rural villages to buy cellphones and buy air time. They then were able to resell the air time to other villagers at a profit.

"They became the pay phones in these small villages," Counts said. Some of the phone owners have now been trained as knowledge workers and use their phones to obtain information to help villagers with crop issues and health problems, he said.

Although Counts' organization does not make loans in the U.S., a related entity, Grameen America, was set up in 2008 to provide microloans to American borrowers.

In its first three months, Grameen America made 165 loans totaling more than $350,000.

Average loans to U.S. borrowers are larger, about $1,500, than those in developing countries. U.S. borrowers also face challenges from government regulations that make it difficult to get into some fields and zoning laws that prohibit people from operating businesses out of their homes.

But a microloan helped Nicole Gates, who borrowed $1,500 to purchase tables and equipment to sell her barbeque and red-velvet cupcakes at New York street fairs, and Amarius Torres, who used her loan to buy perfume and cosmetics to sell door to door.

Grameen America has offices in New York City and in Omaha, Neb., where it was attracted by Warren Buffett. It is working to open branches in Washington, D.C.; Charlotte, N.C.; San Francisco; Indianapolis and, possibly, eventually Phoenix.

Microloans from the foundation are more likely to be made in areas near the branch offices.

There are risks to microlending in general.

Businesses fail, owners encounter health problems and can't work, natural disasters put people out of business and some people just take the money and run.

But Counts said that microlenders such as commercial bankers are getting good at managing those risks.